I’m making a two household two sector model, which aims to simulate a consumption tax on the first good where the revenue is used to subsidize the other good. My issue is that I do not know how to code a permanent increase in tax, which is also gradual. I tried to use shocks but the issue with this is that, when I use shocks the tax variable goes back to the initial value in the last period, and when I use endval to code it to a specific value, it jumps in period 1 to the endval.
Do anyone have experience with coding something like this?
I have uploaded the code:
Baseline1.mod (7.8 KB)